Overview of Mobile Home Park Lenders

Agency Lenders

For 4 or 5 star parks there are Government Agencies – Fannie Mae or Freddie Mac can provide some of the most desirable loan terms. Notoriously picky: parks must have 50%+ double-wides, curbed streets, not more that 5% park owned homes, etc. and locations near major metro areas. Most parks don’t manage to qualify. Loans are nonrecourse and have yield maintenance prepay penalties but are assumable. Look for rates in the 3%s on 5 year and 4%s on 7 or 10 year fixed, 30 year amortization and 75% LTVs.

National Banks.

A handful of lenders are cautiously active about how and where and to whom they will lend: mostly in larger metro areas, 3+ star parks, limited tolerance to park owned homes, RVs, non-city services, etc. LTVs are 65-75%. Typical rates are 4.00% for 5 year fixed and 4.50% for 7 year fixed on 30 year amortizations. These types of lenders will mostly only do similar parks the Agency Lenders would, but with a bit more flexibility. A couple of national banks break the mold with super low rates and can be the best alternative if they can do the deal.

Regional and Local Portfolio Lenders (local banks- most MHP loans are done this way)

Service a few states or locally within a geographic area and will only lend to either or both properties and/or borrowers in their “footprint”. Loans are held and serviced by the lender. For greater US markets: 70% (usually) up to 75% LTVs, 20 to 25 year amortizations and usually 7 year maximum fixed rate periods at typical rates of 4.75%-5.00%. A few regional lenders offer lower rates of 3.80%, 5 year and 4.25%, 7 year fixed periods and 30 year amortizations. Full personal guarantees required and global income ratios evaluated and overall credit profile (680+ FICO) and net worth equal to or exceeding the loan amount with liquidity of 10% of loan amount and experience in RE investment is needed to qualify.

CMBS Lenders (for everything else)

Conduit loans are expensive – with $35k upfront deposits for 3rd party reports, legal and lender fees. But the fees are the industry standard costs of qualifying the loan for inclusion into the portfolio of mortgages that will be securitized and sold as bonds. What do you get in return? 75% LTV, 10 year fixed rates at about 4.50% currently (3/15/15) on 30 year amortizations. The loans are also nonrecourse. Underwriting is thorough but more liberal than Agency or Regional Lenders for operating structure. Loans can handle large portion of park owned homes (must have adequate lot rent income to support the loan), investor owned and homes sold on contract are not a problem. They can handle unusual ownership structures like co-ops and some condominium hybrids. They can loan most anywhere in the country to 2 star + parks with all single-wides and some RVs. The loans carry “defeasance” prepay penalties. Loan amount minimums are now down to $1.2Mil with our lender.

For a Confidential Review, Call or Email David Harley
(415) 250-5300 ● dharley@bluepointcm.com
BRE 01334092

BluePoint Commercial Mortgage ● 655 Redwood Hwy, Ste. 311, Mill Valley, CA 94941● www.bluepointcm.com

PRESS RELEASE: The Madison Group Facilitates a $1,095,000 Non-recourse Commercial Loan for a MHP in Channelview Texas

PRESS RELEASE: The Madison Group Facilitates a $1,095,000 Non-recourse Commercial Loan for a MHP in Channelview Texas
Feb 2015

The Madison Group, a commercial broker and loan consultant, has facilitated the financing for the purchase of an 84 pad manufactured home community in Channelview Texas, within the Houston MSA. The purchase was deemed a true value-add-potential for the buying entity. The park had shown reasonable income over the course of time, but was in need of updates and capital improvements. The Madison group was able to source a transaction that facilitated a nonrecourse loan to a tight knit group of investors.

The $1,095,000 loan was sized to 64% of the loan to value. The borrowers received aggressive terms of 4.38% with a 10 year term and 25 year amortization. The nonrecourse loan allowed them to have an entity be the borrower with no recourse to individuals in the LLC other than standard carve outs. In addition, future increased cash flows will allow the entity to increase their return on investment.

“All parties involved worked diligently to price and size a loan that made sense for the investors and the lender, said Director of Finance Jeff Meierhofer. “Sourcing the right lender from the beginning that understands the product type in the geography of the asset made for a timely closing.”

The financing was arranged by Jeff Meierhofer, Director of Finance at The Madison Group.

The Madison Group (www.madisongroupfunding.com) is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including: multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States. Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital. TMG works efficiently and effectively to get the transaction closed and funded.

TMG and Jeff Meierhofer can be reached at 435-785-8350 or by emailing jeff.m@madisongroupfunding.com

ARA’s National Manufactured Housing Group Executes Sale of 798Site Valley Brook Estates FourStar Community Sits Minutes From Indianapolis International Airport

ARA’s National Manufactured Housing Group Executes Sale of 798-Site Valley Brook Estates
Four-Star Community Sits Minutes From Indianapolis International Airport

Indianapolis, IN (March 02, 2015) — Atlanta-headquartered ARA, the largest, full-service
investment advisory brokerage firm in the nation focusing exclusively on the multi-housing
industry, is pleased to announce the sale of Valley Brook Estates, a 798-site community
located in Indianapolis, IN.

ARA National Manufactured Housing Group’s Andrew Shih based in Austin, TX, Todd
Fletcher and Jon Shay, based in Denver, CO represented Southfield, MI based seller Sun
Communities in the transaction. The buyer in the transaction was Denver, CO based Casa
Feliz LLC.

“Just a few years ago, it was very difficult to find financing for communities like Valley Brook due to its
lower occupancy; however, today it qualifies. With over 60 conduit shops in the market looking to
finance manufactured home communities, the terms are very attractive.” said Todd Fletcher. “We are
seeing owners around the country looking to shed non-core assets and buyers coming in with fresh
equity, conduit money and new business plans,” added Todd Fletcher.

“Although there were 146 community owned homes included in this transaction, almost all of them were
occupied with quality tenants,” said Shih. “We think the buyer will be very successful in improving
performance as they plan to add homes to the community to increase occupancy,” he added.

Constructed from 1973 to 1998 in phases, this mobile home community is located just 13 minutes south
from the recently developed Indianapolis International Airport and just 15 minutes from downtown
Indianapolis, the state capital of Indiana and 13th-largest US city with a population in the MSA of nearly
1.8 million. Several large companies are headquartered in Indianapolis including Eli Lilly, Brightpoint,
Wellpoint, Marsh Supermarkets, Finish Line and hhgregg. The unemployment rate in Indianapolis for
October 2014 was 5.0%, well below the national average of 5.7%.

Valley Brook features an outstanding amenity package including a clubhouse, two swimming pools, two
basketball courts, two playgrounds and RV storage. Public bus transport sits a short fiveminute
walk from the property and will take passengers directly to downtown shopping and entertainment with no
transfers. The local elementary, middle and high schools are all within walking distance of the property.

Occupancy at the time of sale was around 52%.

To schedule an interview with an ARA executive regarding this transaction or for more information
about ARA, nationally please contact Lisa Robinson at lrobinson@ARAusa.com , 404.990.4900 or Amy
Morris at amorris@ARAusa.com , 404.990.4902; locally, Eva Coffee at ecoffee@ARAusa.com
or 512.637.1216.